In a judgment in two test cases with major implications for the motor insurance market, the Supreme Court has rejected the insurers’ challenge to the way in which damages for minor injuries are calculated under the Civil Liability Act 2018. Ben Williams KC acted for the successful claimants.
Although damages in small motor claims are modest, the volume of such claims (c. 300,000 annually) means that their aggregate annual value is hundreds of millions of pounds. In 2018, the Civil Liability Act was introduced to stipulate a heavily reduced tariff for awards for whiplash injuries. The Act was brought into full force in 2021, and has significantly reduced both the damages and costs payable in whiplash claims since. The legislation was, however, unclear as to how the reforms impacted on other injuries suffered together with whiplash injuries. Was concurrent pain, suffering and loss of amenity still compensated by a much more generous common law award? Or was the indirect impact of the Act to limit compensation for other injuries only to such additional losses if any that the claimant could prove were exclusively referrable to the non-whiplash injuries?
The Court of Appeal was divided on this issue, the majority holding that claimants remained entitled to full common law compensation for their non-whiplash injuries, but the Master of Rolls expressing a powerful dissent.
Today, the Supreme Court has affirmed the majority approach, and dismissed the insurers’ appeals.
Cross-appeals, arguing that the tariff and common law awards should simply be added together were also dismissed.
Giving the unanimous judgment, Lord Burrows explained the correct methodology to be as follows, accepting the claimants’ alternative (i.e. non-cross appeal) case. The court should: (i) assess the tariff amount for the whiplash; (ii) assess the common law damages for the other injuries; (iii) add the figures together; (iv) step back and consider whether a ‘totality’ adjustment was needed to avoid over or under-compensation for concurrently caused loss; (v) make any such adjustment to the common law award; but (vi) ensure that the total damages was not less than would have been awarded at common law for the non-whiplash injury alone.
Ben Williams led Shannon Eastwood of Atlantic Chambers on the appeals.
Click here to read the judgment in full
